Comments by Luchillo

The solution to the current global imbalances would be less painful if the approach was symmetrical: both creditor (surplus) and debtor (deficit) countries should adjust concurrently. However, reality dictates that the need for adjustment becomes more urgent for the debtor countries given their more urgent needs to solve their more problematic constraints. How to resolve this?

If Brazil's GDP is now growing at about 8-9% per annum, and its potential GDP growth is about 5-6% p.a., then obviously there are excess internal demand and inflationary pressures. No wonder it is starting to show an external commercial deficit as well. Basic macroeconomics, my dear readers... It would be wise, then, if Brazil's government and central bank start diminishing expansionry fiscal and monetary policies. 2 + 2 = 4, not 5 nor 3. Así de simple.

My hunch: Chavez will de killed by the mobs he was supposed to benefit, like Mussolini. The truth is that, when other LA countries are flourishing (Brazil, Colombia, Chile and Peru) by following pro-market and open economic policies, the "nationalist" countries (Venezuela, Bolivia, Ecuador and Nicaragua) are starting to show signs of fatigue and stagnation, not to mention internal inflation, because they don't invest for the future and don't increase future production capacities. They instead consume more just for the short run benefit of political supporters, not to mention uncontrolled corruption of the new power elites, and that is eventually self defeating! History will teach us which countries were right and which were wrong.

Hopefully they will also include concepts like global macroeconomic imbalances, where surplus countries tend to save too much (China) and deficit countries tend to consume too much (USA); and the difficulties to recover globally if these imbalances are not reduced considerably.

Complementing DC-Reader, there is also a political reason for getting rid of Zelaya, which is probably more important than any other reason: Latin American countries, not yet under the boot of Chavez, have to defend themselves against the expansion of Chavismo with whatever means they can grab, including sending a President to exile in pajamas. These thugs, Chavistas, use democracy to degrade democracy in their own territories. Thus, any means at your disposal to defend yourself against them is valid! Honduras is now perhaps the place where the liberation of Latin America against the Chavista thugs is being decided...

Remember Mussolini's death? That's how Hugo will end up.